The price of gold has risen to a new record high, meaning the standard bar of gold is worth $1 million.
Spot gold rose above $2,525 this morning, surpassing the previous all-time high from last Friday.
The hike in prices follows China’s central bank issuing new import quotas, said some analysts, while others pointed to expectations of cuts to US interest rates, which depressed demand for alternative assets such as bonds and cash.
Gold has been in more demand due to various factors this year, including increased buying by central banks, especially the People's Bank of China.
"Chinese exporters and traders have been seen rushing to buy yuan and probably gold in anticipation of further US dollar weakness," said analyst John Meyer at SP Angel, noting that the yellow metal has also been buoyed by Chinese buying after the PBoC cracked down on local government bond buying and troubles in the Chinese property market led to a switch in investor interest to gold as a "preferred instrument for individual savings in China".
Comments from senior Beijing officials last month emphasised a desire to hold the Chinese currency at a reasonable and balanced level.
The market is waiting for comments from the Jackson Hole meeting where Fed governors are expected to comment on the potential for rate
Traders are also "loading up on gold and bonds" in advance of the Jackson Hole symposium this week, said Mayer, as they speculate that Federal Reserve chief Jerome Powell may provide a hint towards the levels of future rate cuts.
The market currently gives a 75% chance of a quarter-point Fed cut, with expectations of a half-point cut sliding below 25% from near 100% at the start of the month when US jobs figures suggested a potential recession may be coming.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "The recent demand boom can be put down to growing expectations that the US Fed is set to cut interest rates in the coming months. Add in central bank buying, demand for portfolio hedges, and global uncertainty; it’s been a recipe for strong demand over the year."
The price of gold has risen over 21% so far in 2024 and UBS forecast prices could reach $2,600 an ounce by the end of the year.